Mermaid Maritime PLC CIMB Securities (Singapore) Non Deal Roadshow Wednesday 17 August 2011, Singapore

Transcription

1 Mermaid Maritime PLC CIMB Securities (Singapore) Non Deal Roadshow Wednesday 17 August 2011, Singapore 1

2 Disclaimer This Investor Presentation has been prepared by Mermaid Maritime Plc for investors, solely for information purposes. The views expressed here contain some information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. Financial numbers if presented in other currencies other than THB are strictly for illustrative purpose only and based on prevailing interbank lending exchange rate at the time of presentation. This presentation should not be relied upon as a recommendation or forecast by Mermaid Maritime PLC. Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction. 2

3 Agenda 1. Introduction 2. Subsea Business Overview 3. Drilling Business Overview 4. Asia Offshore Drilling Overview 5. Financial Overview 6. Questions & Answers 3

4 1. Introduction 4

5 Overview of Mermaid Maritime Plc 27 Years since Mermaid Maritime s establishment 5 regions in which Mermaid operates 500 skilled workers, crews, technicians, service providers & management SUBSEA BUSINESS 8 subsea vessels 4 saturation diving systems North Sea Middle East India Asia Pacific/ SE Asia DRILLING BUSINESS 2 Tender drilling rigs 3 high spec jack ups* 14 remotely operated vehicles South America * 33.75% ownership through Asia Offshore Drilling Limited Subsea inspection, repair and maintenance Subsea Infrastructure installation support Subsea remotely operated vehicle support Subsea emergency callout service Subsea salvage Accommodation rig services Offshore drilling and workover services 5

6 Two Key Businesses to Balance Earnings 6

7 Key Milestones 1983 Established in Thailand 2005 Expanded subsea business and purchased Mermaid Responder and Mermaid Commander. Incorporated Mermaid Drilling Ltd. and commenced offshore drilling services with purchase of tender rigs MTR 1 and MTR Converted to a public company and listed on the Singapore Stock Exchange. IPO raised ~SGD 218 million. Ordered newbuild Mermaid Sapphire Acquired Seascape Surveys for access to hydrographic and positioning services. Took delivery of Mermaid Challenger. Acquired 20% of Mermaid Asiana under construction Acquired Mermaid Endurer under construction. Took delivery of Mermaid Sapphire and purchased remaining 80% of Mermaid Asiana under construction. Raised ~SGD 156 million from rights issue Acquired Subtech to expand subsea services in the Middle East and Persian Gulf. Disposed Mermaid Responder, purchased Mermaid Siam and took delivery of Mermaid Endurer and Mermaid Asiana bringing total subsea fleet to 8 vessels. Acquired 49% equity stake in Asia Offshore Drilling with two high specification jack ups under construction with Keppel FELS, bring the total potential drilling fleet investment to 4 rigs Asia Offshore Drilling (AOD) listed in Oslo Axess on 15 July AOD raised additional funds of USD 80 million through private placement to exercise rig options with Keppel FELS with entry of Seadrill as strategic shareholder holding equal stake of 33.75% with Mermaid Mermaid commenced strategic initiative for Mermaid Offshore to enhance shareholder value. 7

8 2. Subsea Business Overview 8

9 Subsea Services Overview Overview Mermaid Offshore Services ( MOS ) provides subsea engineering services including surveying, inspection, repair and maintenance (IMR), light construction and ROV/dive support, to the offshore oil and gas industry 488 employees operating in Southeast Asia and the Middle East Current contract backlog exceeds USD 100 million Defensible positions in Gulf of Thailand, Middle East marketed through Subtech subsidiary and Indonesia supported by Seascape their surveying subsidiary MOS offices Seascape offices Subtech offices Geographical focus Geography Qatar 0 Bangkok, Thailand Chonburi, Thailand Singapore Jakarta, Indonesia 8 subsea vessels Fleet Vessel name Type Year built Past selected clients Mermaid Commander DNV Classed DP2 DSV 1987 Shell Brunei, CUEL, Global Mermaid Endurer DNV Classed DP2 DSV 2010 ISS, Bibby, Micoperi Mermaid Asiana ABS Classed DP2 DSV 2010 PT Timas, CSOTL, COOEC, CACT Mermaid Siam DNV Classed DP2 Construction Support 2002 Total, Maersk, NPCC, Acergy, Occidental Petroleum Barge Mermaid Sapphire ABS Classed DP2 ROV & Air Diving Support Vessel 2009 CUEL, PTTEP, SEIC Mermaid Challenger 14 ROVs DNV Classed DP1 Anchor handling Vessel 2008 EMAS, Mermaid Drilling, KNOC Mermaid Performer DNV Class Utility Vessel 1982 CUEL, Modec, and Chevron SS Barakuda Utility / Survey Vessel 1982 ConocoPhillips Key Clients 4 saturation diving systems 9

10 Seascape Surveys Limited 80% owned by MOS since March 2008 Key customers Founded in 2005, Seascape has over 90 personnel employed in offices located in Singapore, Indonesia and Thailand Provides survey, positioning, and subsea inspection services in the Asia Pacific region Surface and subsea positioning services onboard DP vessels Provision of offshore construction barge/vessel support survey services Performance of subsea inspection data acquisition, data management and reporting services Strong foothold in Indonesia, its primary target market, due to strong local presence and track record in the region Seascape acts as Indonesian Representative Company for MOS Annual turnover in FY2010 of approximately USD 20 million Contractor Member of the International Marine Contractor Association (IMCA) In November 2010, Mermaid Supporter was transferred to PT Seascape Surveys Indonesia and renamed SS Barakuda SS Barakuda will be the dedicated survey and ROV inspection vessel for the Indonesian market 10 SS Barakuda

11 Subtech Limited Wholly owned by MOS since March 2010 Key customers Established in 1995, with operation in Qatar Provides turnkey subsea support services to local and international clients: Dive intervention (air & saturation) Salvage operations Subsea installations, repairs, inspections and maintenance Subsea engineering Has access to about 600 offshore personnel, out of which 85 are diving professionals Strong foothold in the Middle East region, with a presence in the Gulf of Mexico and Far East region and expansion plans into West Africa Helped MOS to successfully penetrate into the Middle East and Persian Gulf region Strong client relationships in the region helped to drive MOS marketing and vessel utilization Only locally incorporated diving contractor with a proven track record Strong local business knowledge Profitable business with notable contributions to MOS 11 For FY2010, more than a third of bids submitted by MOS were through Subtech Annualized turnover of USD 20 million in FY2010

12 Strong diving & ROV capabilities Proven track record in diving services MOS owns and operates three DP2 DSVs, one DP2 construction barge fitted with a saturation diving system and a pool of 14 ROVs MOS has IMCA compliant diving capabilities MOS owns dive training facilities with a pool and equipment Provided diving services to reputable companies: Access to high quality pool of divers MOS has access to extensive database of skilled multi disciplined professional divers MOS s established safety record and working relationship with divers have earned them ready access to this niche pool of skilled divers Historical operations Air and saturation dive systems, ROV systems employed for Subsea tie ins and riser installations Debris removal and pipeline abandonment Pipeline inspection and repair SBM installation, support correction FPSO UWILD inspection hull, moorings, subsea hose assemblies, blanking sea chests Platform inspection Offshore construction support Platform repairs using wet welding techniques and habitat welding Pipeline inspection 12

13 Subsea Fleet Vessel Type Vessel Type Purpose Vessels in Our Fleet Diving Support Vessels (DSVs) Utility Vessels Diving support vessel is a vessel that is used as a floating base for commercial diving projects. It usually includes a Dynamic Positioning (DP) system to maintain the ships position over a dive site by using multi directional thrusters controlled by onboard computers, and Saturation (SAT) Diving System, which allows professional divers to live and work at depths greater than 160 ft for days or weeks at a time. There are a number of support systems for the saturation system on a DSV, usually including a Remotely Operated Vehicle (ROV) and heavy lifting equipment. Utility boats (mini supply vessels) are typically used to support production operations, providing storage space, emergency standby, and transporting personnel between platforms. Utility boats are well suited to support smaller, near shore production facilities. ROV Support Vessel An ROV support vessels is usually built to accommodate and operate remotely operated underwater vehicle (ROVs), which are unoccupied, highly maneuverable robots operated by a person aboard a vessel. They are linked to the vessel by a tether (sometimes referred to as an umbilical cable), a group of cables that carry electrical power, video and data signals back and forth between the operator and the vehicle. 13

14 Key competitive advantages Strong position in Thailand, Indonesia and the Middle East Parent company, Mermaid Maritime established in Thailand in 1983 Incumbent positions in Gulf of Thailand, Middle East and Indonesia Long term relationships with blue chip clients in the region Established dive company, with access to high quality pool of professional divers Owns and operates three DP2 DSVs, one DP2 construction barge fitted with a saturation diving system and a pool of 14 ROVs IMCA compliant; provided diving services to blue chip operators in the global oil & gas industry Access to professional divers with an established safety record and good labor relationships New management team put in place to drive employment and value added service wins Solid contract backlog with significant, achievable upside potential Willingness to explore strategic opportunities MOS management team has an average experience of over 20 years Recent senior team hires set to enhance commercial and project management capabilities Management hub to be relocated to Singapore to raise the company s profile with customers Current firm contract backlog of USD 100 million Contracts are with reputable industry players such as COOEC, CACT, CUEL, PTTEP and Chevron, in Asia Pacific and the Middle East Potential for repeat business from clients in this region Immediate access to the Asian market through an established player Capable fleet available for future deployment in full service mode Ideal timing demand for subsea services expected to strengthen through

15 Incumbent position in key geographies MOS has a strong foothold in its key markets Thailand, Indonesia, and the Middle East MOS can leverage on its strong presence in these three markets to win repeat business with key clients, while continuing to expanding its geographical footprint in existing markets like China, and new markets like Brazil and India Thailand: MOS s headquarters and logistics base 28 years of market presence in Thailand The logistics base in Chonburi, being in close proximity to several deep water ports, facilitates efficient mobilization of personnel and equipment MOS has IMCA compliant diving capabilities, and was awarded the ISO9001:2008 quality management systems certification Key clients: Chevron Thailand and CUEL, NPCC, PTTEP, and Romona Indonesia: Via subsidiary Seascape Seascape primarily provides hydrographic survey and positioning services in South East Asia Contractor Member of the International Marine Contractor Association (IMCA) Seascape has a strong network in Indonesia, with most of its projects located in various parts of Indonesia Key clients: ConocoPhillips Indonesia, Chevron Indonesia, PT Hallin Indonesia, and PT Timas Suplindo Middle East: Via subsidiary Subtech Subtech (Qatar) is an IMCA member and ISO 9002 approved diving and subsea contractor in Qatar Subtech is the only locally incorporated diving contractor with a proven track record, allowing MOS to successfully penetrate into the Middle East market Key clients: Qatar Petroleum, Exxon Mobil, Occidental, McDermott, Maersk Oil Qatar, and NPCC Strong local business knowledge 15

16 Global oil demand is increasing Oil demand is projected to grow by 1% per year on average Global oil demand All the growth is expected to come from non OECD countries The transport sector accounts for the majority of the increase in oil use As conventional oil production in non OPEC countries is expected to peak soon, most of the increase in output would need to come from OPEC countries, which hold the bulk of remaining recoverable conventional oil resources Source: Reference Scenario, World Energy Outlook 2010, International Energy Agency 16 16

17 Increased E&P spending driven by higher oil prices Strong growth in E&P spending expected the next few years Oil service companies revenues and E&P spending 2008 level of E&P spending is expected to be surpassed in 2011 Projects postponed as a consequence of the financial turmoil, has accumulated demand A continued price level above USD 100 per barrel is expected to be a catalyst to E&P spending Source: Reuters, RS Platou 17

18 Strongest growth expected in the Southern hemisphere Strongest growth expected in Brazil, West Africa and Asia Pacific 11 known new offshore projects in South East Asia from 2010 Known offshore projects in South East Asia with first oil from 10e Project Country Location Operator Award First oil Total reserves (mboe) Water depth (ft) Terang Sirasun Indonesia Kangean EMP 2010E Pagerungan Utara Indonesia East Java Kangean 2010E Te Giac Trang Vietnam Block 16 1 Cuu Long Basin PetroVietnam 2010E 2011E South Mahakam Phase 1 Indonesia Kalimantan Total 2012E 200 Malakai Malaysia Block G Shell 2012E 108 1,570 Pisagan Malaysia Block G Shell 2012E 56 3,280 Bongkok South Thailand Gulf of Thailand Total 2012E Gendalo Gehem Indonesia Kutei Basin Chevron 2010E 2013E 1,100 5,900 Malikai Malaysia Block G Shell 2010E 2014E 108 1,570 Voi Trang Vietnam Block 16 1 PetroVietnam 2014E Sunrise Ph1 Timor/Australia Timor Leste Island Woodside 2011E 2015E 32,268 1,310 Source: Quest Offshore, RS Platou Markets 18

19 Strong Demand for Subsea Construction Expected Subsea construction market Subsea tree awards Successful drilling of commercial discoveries will eventually lead to field development tendering Awards of subsea tree is a proxy of FD activity Increased level of subsea tree awards expected Subsea tree awards IMR Pipelaying activity Installed base of subsea trees grows substantially Will require significant ongoing IMR work Expected to have a growth rate of more than 10% between 2010 and 2015 A field development will involve demand for pipeline installation SURF activity Decommissioning Fields ready for decommissioning is increasing in mature regions, but due to high oil prices the decommissioning has been delayed Strong demand for subsea construction operations expected Source: Quest Offshore, Infield 19

20 Improving Longer Term Rates Outlook LAYSV rates in 4 scenarios DSV rates in 4 scenarios Rates weakened further in 2009 although this was supported by forward coverage & commitments Increasing utilization becomes more important than high rates to maintain cash flow A 30% increase in demand is required to lift rates to previous peak levels though in the medium term, there will continue to be weakening of rates Source: Strategic Offshore Research, Global Sunsea Market to

21 Markets will recover, slowly but surely Global demand by vessel type Global vessel utilization North Sea DSV dayrates to

22 3. Drilling Business Overview 22

23 Tender Market North Sea No tender rig activity UKCS/ North Sea 22 tender rigs 17 working 5 in Shipyard or idle, 4 contracts in 2010 had age limits GoM Middle East GOM No tender rig activity Asia Pacific including SE Asia West Africa No tender rig activity 6 tender rigs. 3 working 3 Ready stacked 1 returned to Asia Tender rigs primarily work in two regions only 23

24 Drilling Operations Update MTR 1 Location: Thailand Status: Waiting next contract award Client: NA MTR 1: Currently awaiting a decision on proposals on a contract for her to be employed as an accommodation barge by Chevron Indonesia MTR 2: Previous contract for MTR 2 ended at the end of March 2011, and she is working on a new 9 months contract for 270 days worth USD 26.5 million in Indonesia. MTR 2 Location: Indonesia Status: Active in drilling operations Client: Chevron Indonesia MDL continues to enjoy outstanding safety performance which will serve as strong reference for future tenders, recently achieved 2 year operations with no losstime accident. 24

25 4. Asia Offshore Drilling Overview 25

26 New vs. Old Jack up Utilization Source: Pareto Research, ODS-Petrodata 26

27 Supply/Demand in the Jack Up Market (10 years) 68 cold stacked jack ups projected to never enter the market again. Another ~170 jack ups projected to be obsolete in Rest of the 1980 built jack ups will be inactive units in Clear trend that new rigs will get work and replace older units as oil companies prefer newer assets new jack up rigs needed by 2020 Source: Pareto Research 27

28 Increasing Spreads for Jack Up Day Rates Spread in day rates and values due to : 1. More efficient conventional drilling from newer units 2. Inability of vintage jackups to handle high pressure wells 3. Deck capacity larger on new units positive for deep wells and wells far from shore (reduced supply vessel costs) 4. Safety for employees, in addition to comfort Increasing spreads for Jack up day rates with higher spec rigs achieving $/day Source: Pareto Research, ODS-Petrodata 28

29 29 Asia Offshore Drilling Update Other Investors 51% Mermaid 49% Seadrill 33.75% Mermaid 33.75% Other Investors 32.5% PP successfully completed, Mermaid allocated 49% for ~USD 49 mn in AOD Strike Steel at Keppel FELS for Hull-B nd PP successfully completed. Seadrill becomes equal major shareholder with Mermaid Listed in Oslo Axess Delivery of three jack up rigs AOD signs construction contracts with Singapore Keppel FELS for 2 jack up rigs + 2 options Strike Steel at Keppel FELS for Hull-B AOD signs construction contracts with Singapore Keppel FELS for 3 rd jack up rig Turnkey contract for delivery of three jack up rigs in December 2012, March 2013 and September % down payment and 80% on delivery Keppel FELS to undertake complete EPC responsibility Third party vendors chosen by Keppel FELS from vendor list accepted by Mermaid Standard warranty periods to apply for rig and third party equipment

30 Asia Offshore Drilling Company Structure Seadrill Limited 33.75% Corporate Management Agreement Technical & Commercial Management Agreement As AOD s activites increase, a complete management team will be appointed in the company, at which time the Technical, Commercial and Corporate Management agreements will be cancelled Asia Offshore Drilling Ltd. (Bermuda) Mermaid Maritime Plc. (Thailand) 33.75% Other Investors 32.50% One rig option construction contract Asia Offshore Rig 1 Ltd. (100%) )(Bermuda) Asia Offshore Rig 2 Ltd. (100%) (Bermuda) Asia Offshore Rig 3 Ltd. (100%) (Bermuda) Turnkey Construction Contract Turnkey Construction Contract Turnkey Construction Contract Contracts & Agreements Ownership Structure Keppel FELS (Singapore) 30

31 31 The KFELS MOD V B Class Design Proven design and solid track record with wide geographical application. Preferred design by major drilling companies. 24 MOD V B Class delivered by KFELS since 2006 with zero late deliveries and 14 ahead of schedule 26 Potential markets for the KFELS MOD V B Class Rigs GoM Southern North Sea Middle East Offshore India SE Asia Indian Ocean Offshore Australia Offshore New Zealand

32 5. Financial Overview Note: All figures presented in currencies other than THB are strictly for illustrative purpose only using exchange rate of 1 USD: Baht 32

33 Financial Highlights 3Q2011 Year on Year Comparison 3M 3Q2011Revenue (in THB millions) 9M Operating Cash Flow (in THB millions) 3M 3Q2011 Net Profit (Loss) (in THB millions) Basic and Diluted EPS 1, Q2010 3Q2011 3Q2010 (0.34) Q2011 (376) (276) Revenue Growth/Decline & Operating Cash Flow Net Profit (Loss) Growth/Decline & Basic and Diluted EPS Not to scale. For illustrative purpose only 33

34 3Q2011 Sector Breakdown (3 Months) Description Service Income Operating Profit/Loss Operating Margin Utilization Rate Inspection, repair and Subsea Services maintenance; Infrastructure installation; Deepwater ROV support; Emergency call out services; Salvage 1,072.8 (23.8) (4.2%) 11.2% 56.6% 75.3% Drilling Services Floating rigs, Accommodation rigs % 49.9% (26.3) (10.5%) (148.7) (57.2%) 3Q2011 Drilling 17.2% Revenue Breakdown Others 9.0% (includes Seascape) Subsea 73.8% (excludes Seascape ) Operating Profit/Loss Breakdown Others 19.9% (includes Seascape ) Drilling (22.4%) Subsea 102.5% All units in THB millions. Not to scale, for illustrative purpose only 34

35 3Q2011 Profits & Losses (3 months) All units in THB millions 3Q2010 Gross Profit Mgmt income Interest & Other income Admin Expenses Forex gains (losses) Net gains on PPE disposals Share of Profits of investments in associates Impair Losses of PPE Net gains on disposal of investments in subsidiaries/ associates Finance Costs Income Taxes 3Q % Y on Y (12.1) (11.8) (17.1) (20.2) (86.4) (275.8) Includes depreciation AOD Mgmt Fee Share of loss in AOD in 2011 Management Services provided to AOD Impairment of MTR 1 Disposal of KM 1 in 3Q2010 Decrease due to lower payments of employee benefits in 3QFY11 as compared to 3QFY10 (deferred tax assets impact) Higher Avg Loan Balance due to delivery Not to scale. For illustrative purpose only of new vessels 35

36 Debt structure Net D/E (Times) Net gearing (%) Low D/E ratio allows financial flexibility Loan Maturity Units in THB millions < 1 year Total loans outstanding continues to decrease during 9M2011 * 13.5% 16.82% 6.25% 19.21% < 1 year , , Q2011 > 1 year 4Q2010 > 1 year 3Q2011 * EXIM Loans have not been fully drawn down Loan Repayment Schedule (USD Million) Repayment amount FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY Remark: Exchange rate for conversion of loans in THB to USD was Baht : USD 1 Not to scale. For illustrative purpose only 36

37 Cash flow Cash & Cash Equivalents 1, ,742.9 Short Term Investments (fixed deposits) All units in THB millions , ,216.9 Total cash in hand has decreased mainly due to dividend payment, debt repayment and investment in AOD CF from Financing CF From Operations CF from Investments , , , (2,944.0) (3,874.8) (6,288.1) (1,105.3) (376.7) (1,027.4) One off dividend and repayment of LT debt Investment in AOD Not to scale. For illustrative purpose only M 3Q2010 9M 3Q

38 6. Questions & Answers 38